February 2026 Oakstreet Financial Newsletter
The Kingdom of God is advancing, and the gates of hell will not prevail! This month's newsletter brings great news about potential lives spared through Inspire Investing's corporate engagement, IRS contribution limit changes for retirement plans, and a review of January's financial markets.
Inspire's Corporate Engagement Update
Through Inspire Investing’s corporate engagement efforts, 9,225 pharmacies are not dispensing mifepristone, the abortion drug. This includes major retailers such as Costco, Walmart, and Kroger. This is a meaningful example of what faithful, Biblically grounded engagement with corporate leadership can accomplish.
You can read more about this and other encouraging developments in Inspire Investing’s 2025 Corporate Engagement Report, Speaking Biblical Truth to Corporate Power. Click here to open the PDF directly on the Inspire Investing website.
2026 IRS Contribution Changes
In December, the IRS released updated retirement and tax limits for 2026. The changes are modest, but a few are worth keeping on your radar as you plan ahead. Additional details are available in our 2026 Important Numbers PDF. Click here to open a new page with the 312 KB PDF.
Individual Retirement Accounts (IRAs)
IRA contribution limits increase by $500 in 2026, bringing the annual limit to $7,500. For those age 50 and older, the catch-up contribution rises by $100 to $1,100, allowing total contributions of up to $8,600.
Roth IRAs
The income phase-out range for Roth IRA contributions increases to $153,000 to $168,000 for single filers and heads of household. For married couples filing jointly, the phase-out range increases to $242,000 to $252,000. Married individuals filing separately remain subject to the $0 to $10,000 phase-out range.
Workplace Retirement Plans
Contribution limits for 401(k), 403(b), 457 plans, and similar workplace accounts increase by $1,000 in 2026, bringing the limit to $24,500. Those age 50 and older may contribute an additional $8,000, for a total of $32,500. Individuals ages 60 through 63 are eligible for an enhanced catch-up contribution of $11,250, allowing total contributions of up to $35,750.
SIMPLE Retirement Accounts
SIMPLE plan contribution limits increase by $500 to $17,000 for 2026. Under the SECURE Act 2.0, certain eligible plans may allow contributions of up to $18,100.
Other Notable Changes
The IRS also announced an increase in the annual gift tax exclusion to $19,000 per person, along with a higher estate tax exclusion threshold.
[These updates are provided for informational purposes only. Before making any tax or retirement planning decisions, we recommend coordinating with your tax professional. If you would like help thinking through how these changes may fit into your overall planning, please feel free to reach out directly to me.]
January 2026 Financial Market Review
January brought a mix of resilience and real economic crosscurrents. On the positive side, consumer demand remained firm and the service sector continued to expand. Lower mortgage rates helped lift home sales late in the year, contributing to momentum in the housing market. At the same time, pockets of weakness persisted, particularly in factory activity. Inflation is moderating but still above where policymakers would like, and the Federal Reserve is signaling that it won’t rush into rate cuts even as political pressure builds for more aggressive easing.
Market Performance Highlights
Smaller company stocks captured attention in January. After years in the shadow of the largest technology names, the Russell 2000 index outperformed larger benchmarks for a notable stretch, winning 14 straight trading sessions against the S&P 500 early in the month. That degree of relative small-cap strength is rare in recent history.
• The S&P 500 finished January modestly higher at 1.37%
• The Dow Jones Industrial Average also posted a gain of 1.2%, reflecting broad participation.
• The Nasdaq 100 rose 1.73% as growth names continued to find support alongside improving breadth.
Economic Snapshot
• Growth: The economy entered 2026 on solid footing. Revised data show the U.S. expanded at a 4.4 percent annualized rate in the third quarter of 2025, the strongest pace in roughly two years. This was driven by solid consumer spending, investment, and exports. High-frequency indicators suggest that growth will slow from those levels as 2026 progresses.
• Labor Market: December’s payroll figures showed job growth was softer than in 2024 but still positive, with around 50,000 positions added. Unemployment held near 4.4 percent, implying the labor market is cooling gradually without breaking. Wage growth has moderated, which supports consumer spending while easing inflation pressure.
• Inflation: Headline CPI for December was reported at about 2.7 percent year over year, down from higher readings earlier in 2025. This is close to the Fed’s 2 percent target but not fully there yet. Producer prices showed a notable monthly rise, in part due to tariff-related cost pass-through.
• Manufacturing vs Services: Late-year data showed the ISM manufacturing index contracted in December, but early January data suggest a rebound back into expansion territory. That move would end an extended downturn in factory activity, though labor and inventories in manufacturing still lag broader demand. Meanwhile, service sector activity and consumer spending remained steady.
• Housing and Credit Conditions: Lower mortgage rates helped lift housing transactions in December, and credit spreads remained relatively tight, indicating financial conditions are still supportive for borrowers.
What We Are Watching
The current backdrop reflects a mature economic expansion. Growth is positive, inflation is trending lower, and the Fed appears to be near the end of its easing cycle. What is notable now is the broadening of market leadership. After several years dominated by the largest technology stocks, smaller companies and sectors tied more closely to the domestic economy are showing relative strength. That can signal confidence in earnings and financing conditions outside of the mega-cap cohort.
Market ups and downs are a normal part of investing, and history shows that staying invested with a diversified, long-term plan has tended to reward patient investors over time. Short-term volatility doesn’t change your goals or time horizon, and sticking with a disciplined approach has helped many investors ride through market swings and benefit from long-term growth potential.
If you have questions about your portfolio or would like to discuss any of this, we are available.
At Oakstreet Financial, we help faith-driven Americans Invest on Purpose.
We build a plan that brings confidence and peace. If you would like to explore whether this approach is right for you, we invite you to start a conversation with us.